EX-12 116 c70535exv12.txt COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES EXHIBIT 12 EXTENDICARE HEALTH SERVICES INC. EARNINGS TO FIXED CHARGE CALCULATION
PROFORMA ---------------------- ACTUAL FOR THREE 3 months 12 months MONTHS ENDED ended ended ------------------- Mar. 31 Dec. 31 Mar. 31 Mar. 31 2002 2001 2002 2001 -------- --------- ------- ------- EARNINGS FROM CONTINUING OPERATIONS Earnings before extraordinary items, taxes and minority interest 1,613 (45,360) 2,970 (10,430) Add: Fixed charges 11,046 49,815 9,689 11,993 Amortization of interest capitalized - - - - Less: Interest capitalized - - - - ------- ------- ------- ------- EARNINGS 12,659 4,455 12,659 1,563 ======= ======= ======= ======= FIXED CHARGES Interest expense (including amortization of deferred financing charges) 9,687 43,285 8,330 10,283 Interest capitalized - - - - Estimate of interest within rental expense 1,359 6,530 1,359 1,710 ------- ------- ------- ------- TOTAL FIXED CHARGES 11,046 49,815 9,689 11,993 ======= ======= ======= ======= EARNINGS TO FIXED CHARGES RATIO 1.15 0.09 1.31 0.13 ------- ------- ------- ------- DOLLAR AMOUNT OF THE DEFICIENCY na 45,360 na 10,430 (if less than 1:1 ratio) ESTIMATE OF INTEREST WITHIN RENT EXPENSE: Rental expense 3,034 14,575 3,034 3,817 Multiplier 8 8 8 8 ------- ------- ------- ------- Value of rented equipment/assets 24,272 116,600 24,272 30,536 Equity assumed at 20% 4,854 23,320 4,854 6,107 Debt of Lessor 19,418 93,280 19,418 24,429 Estimated interest rate 7.0% 7.0% 7.0% 7.0% ------- ------- ------- ------- Estimated interest expense in rent 1,359 6,530 1,359 1,710 ======= ======= ======= ======= PROFORMA IMPACT OF DEBT OFFERING Interest expense as reported 8,330 37,857 Incremental interest expense 1,357 5,428 ------- ------- Proforma interest expense 9,687 43,285 ======= ======= Earnings as reported 2,970 (39,932) Incremental interest expense (1,357) (5,428) ------- ------- Proforma earnings 1,613 (45,360) ======= =======
ACTUAL FOR 12 MONTHS ENDED ------------------------------------------------------------------ Mar. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2002 2001 2000 1999 1998 1997 ------- ------- ------- ------- ------- ------- EARNINGS FROM CONTINUING OPERATIONS Earnings before extraordinary items, taxes and minority interest (26,532) (39,932) (82,346) (123,180) 109,252 59,130 Add: Fixed charges 42,083 44,387 53,588 60,251 66,175 30,919 Amortization of interest capitalized - - - - - - Less: Interest capitalized - - - (301) (1,099) (825) ------- ------- ------- ------- ------- -------- EARNINGS 15,551 4,455 (28,758) (63,230) 174,328 89,224 ======= ======= ======= ======= ======= ======== FIXED CHARGES Interest expense (including amortization of deferred financing charges) 35,904 37,857 46,541 52,499 57,955 25,519 Interest capitalized - - - 301 1,099 825 Estimate of interest within rental expense 6,179 6,530 7,047 7,451 7,121 4,575 ------- ------- ------- ------- ------- -------- TOTAL FIXED CHARGES 42,083 44,387 53,588 60,251 66,175 30,919 ======= ======= ======= ======= ======= ======== EARNINGS TO FIXED CHARGES RATIO 0.37 0.10 (0.54) (1.05) 2.63 2.89 ------- ------- ------- ------- ------- -------- DOLLAR AMOUNT OF THE DEFICIENCY 26,532 39,932 82,346 123,481 na na (if less than 1:1 ratio) ESTIMATE OF INTEREST WITHIN RENT EXPENSE: Rental expense 13,792 14,575 15,731 16,631 15,895 10,213 Multiplier 8 8 8 8 8 8 ------- ------- ------- ------- ------- -------- Value of rented equipment/assets 110,336 116,600 125,848 133,048 127,160 81,704 Equity assumed at 20% 22,067 23,320 25,170 26,610 25,432 16,341 Debt of Lessor 88,269 93,280 100,678 106,438 101,728 65,363 Estimated interest rate 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% ------- ------- ------- ------- ------- -------- Estimated interest expense in rent 6,179 6,530 7,047 7,451 7,121 4,575 ======= ======= ======= ======= ======= ======== PROFORMA IMPACT OF DEBT OFFERING Interest expense as reported Incremental interest expense Proforma interest expense Earnings as reported Incremental interest expense Proforma earnings